Economist: Forest Fire Prevention Costs Less Than Economic Losses

Trimegah Sekuritas Indonesia Chief Economist Fakhrul Fulvian believes that forest and land fires (karhutla) amid the current El Niño development can cause economic impacts far broader than the value of the burnt land or forest itself.

“Disasters have a multiplier effect that is often invisible on the first day. Initially it may be a land fire. After that, health problems emerge, work activities are disrupted, schools are disrupted, transport is disrupted, and ultimately economic activity and people’s livelihoods weaken,” Fakhrul said in a statement in Jakarta on Sunday (23/8/2026).

He explained that smoke haze can increase respiratory problems and public health costs. School activities can also be disrupted and worker productivity can decline when air quality deteriorates.

Disruption can also spread to aviation and transport, goods distribution, local trade, and daily community activities.

In regions dependent on agriculture, prolonged dry conditions can also affect water availability and food production. If it lasts long enough, the impact can appear in the form of food price pressures and declining community incomes.

According to Fakhrul, disaster prevention is actually also part of maintaining the continuity of economic activity. One unique characteristic of disaster budgets, he said, is that their success is often visible precisely when something does not happen.

When fires are successfully controlled before spreading, no economic activity stops. When early warning systems work well, communities can anticipate risks earlier.

When logistics and equipment are already available, responses can also be carried out without having to wait for conditions to worsen.

According to him, the losses successfully prevented rarely appear in economic statistics, but they have real value for society.

“We can often calculate the cost of a disaster after it occurs. What is far more difficult to calculate is the loss that did not happen because prevention worked. Yet economically its value can be very large,” Fakhrul said.

Therefore, according to Fakhrul, the principle of prevention being better than cure is not only a social or health principle, but also carries strong economic logic.